As a business owner, one of the vital steps in business is being able to make informed decisions that will positively impact the profitability of your business. I did that by implementing Profit First in my bookkeeping business which then led me to start my second business, Profit First for Tradies. Profit First is a powerful tool that can help you understand your business in a way many businesses never thought they could.

In Profit First we talk about your real revenue, profit, owners pay, tax and operating as well as ensuring we have put money aside for GST and Materials and Subcontractors.

The Instant Assessment is the tool that allows us to assess our business and help us determine our percentages to allocate each week to each bank account.

The Instant Assessment may seem overwhelming at first, and it is the stage of the Profit First process that I get most people reach out for help as it can seem a little overwhelming at first. The main reason it is overwhelming for so many people is because they aren’t clear on their numbers as their Xero file is often not up to date and they aren’t 100% confident that the data in that system is right.

Often at the Instant Assessment stage we have to take clients a few steps back to their bookkeeping before we can work on teaching them how to do the Instant Assessment so that we can fix the data in their Xero file before taking the step towards the Instant Assessment.

If you aren’t sure if your Xero file data is correct then best to reach out and have a specialist bookkeeper do a full Xero review for you. With every new client we take on we always do a full Xero review to ensure that the data is correct. You would be surprised at how many clients that their Xero file is up to scratch only for use to find a large number of issues which are all contributing to the financial stress they are under.

Once we have completed the Xero repairs for them  we can then move onto the Instant Assessment to gain the right perspectives and percentages for your business. By using the Instant Assessment, you can confidently put strategies in place that will sustain your business and help you achieve your goals.

One crucial aspect of the Instant Assessment is working out the real revenue range your business falls into. The real revenue of your business is your income after GST and after materials and subcontractors have been set aside. This may mean that your real revenue is much lower in some cases and if this is the case it is worth investigating as to why.

You will then be able to work out your current allocated percentages, your CAPS, which tell you where your business is at the moment and again sometimes these percentages don’t look great. This is ok as this step also gives you the opportunity to find the area that needs your focus on first. Working out your CAPS will help you create a clean plan as to what area you are going to work on rather than working on areas of the business you think need work.

The Instant assessment will also tell you your Target Allocation Percentages, your TAPS, which is the goal of where you business should be headed. Again, in many cases it seems like the gap between you CAPS and TAPS might seem like a huge gap to fill and working with a certified Profit First coach will help identify the best plan of action as well as giving you the support and accountability you need to improve the profitability of your business.

While the Instant Assessment may seem daunting at first, it's a powerful tool that can help you transform the way you make business decisions. By consistently practicing the Instant Assessment, you can gain a better understanding of your business's financial health and work towards achieving your goals.

When you implement Profit First in your business  the Instant Assessment becomes the vital tool for any business owner looking to gain a deeper understanding of their company's financial health. By using the Instant Assessment, you can confidently make informed decisions that will positively impact your business's bottom line, help you reach your goals and most of all help you build your permanently profitable business.

If you are struggling to do your Instant Assessment, reach out to book a call to discuss how we can work together to get you on the permanently profitable track with Profit First.